Medical Consumption over the Life Cycle: Facts from a U.S. Medical Expenditure Panel Survey

35 Pages Posted: 6 Mar 2010 Last revised: 9 Oct 2014

See all articles by Juergen Jung

Juergen Jung

Towson University - Department of Economics

Chung Tran

Australian National University (ANU) - School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 15, 2013

Abstract

We investigate the association between age and medical spending in the U.S. using data from the Medical Expenditure Panel Survey (MEPS). We estimate a partially linear seminonparametric model and construct "pure" life-cycle profiles of health spending simultaneously controlling for time effects (i.e. institutional changes and business cycles effects) and cohort effects (i.e. generation specific conditions). We find that time and cohort effects together introduce a significant estimation bias into predictions of health expenditures per age group, especially for individuals older than 60 years. The estimation bias introduced by cohort effects increases monotonically with age while the bias due to time effects is not significant. The overall effect of Medicare on the cohort and time effects biases is negligible.

Keywords: life-cycle profiles, time and cohort effects, partial linear seminonparametric models, pseudo panels, medical expenditure panel survey (MEPS)

JEL Classification: I10, I11, C14, C23, D12, D91, J10

Suggested Citation

Jung, Juergen and Tran, Chung, Medical Consumption over the Life Cycle: Facts from a U.S. Medical Expenditure Panel Survey (November 15, 2013). UNSW Australian School of Business Research Paper No. 2010 ECON 08, Available at SSRN: https://ssrn.com/abstract=1566095

Juergen Jung

Towson University - Department of Economics ( email )

Baltimore, MD
United States
812-345-9182 (Phone)

HOME PAGE: http://https://juejung.github.io/

Chung Tran (Contact Author)

Australian National University (ANU) - School of Economics ( email )

Arndt Building 25B
Canberra, Australian Capital Territory 0200
Australia

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